How much should you spend on your next car? A lot of people recommend budgeting based on a rule of 20/4/10

• 20% down payment on the car.
• 4-year car loan or less.
• 10% or less of your gross monthly income goes towards car expenses including gas, insurance, DMV fees, repairs, parking/speeding tickets, and interest payments.

… Imagine you want to purchase a new car for $30,000 and you earn roughly $50,000 a year. That means you need to put down $6,000 (20% of the cost) and spend no more than $417 a month (10% of your income) on expenses for it.